Striking miners to weigh offer today

Business News / 23 June 2014, 08:00am

Dineo Faku

Miners on strike chant slogans as they march in Nkaneng township outside the Lonmin mine in Rustenburg May 13, 2014. South Africa sent more police to the strike-hit platinum belt on Tuesday to protect miners returning to work this week as producers pushed ahead with plans to end the sector's longest and most costly bout of industrial action. REUTERS/Siphiwe Sibeko (SOUTH AFRICA - Tags: POLITICS BUSINESS COMMODITIES CIVIL UNREST EMPLOYMENT TPX IMAGES OF THE DAY)

Johannesburg - The Association of Mineworkers and Construction Union (Amcu) is preparing a mass meeting in Rustenburg today for a new mandate from its members after meetings with platinum producers to iron out outstanding issues on the settlement offer last week.

Ten days after the union agreed “in principle” to accept the final settlement offer, no deal has been signed to end South Africa’s longest strike.

It remains unclear when a deal is likely to be signed.

The talks between Amcu and employers are expected to continue this week.

Amcu is expected to inform its members on the outcome of discussions last week with employers that focused on ironing out the new terms tabled by the union.

Jimmy Gama, Amcu’s national treasurer, told Bloomberg yesterday that a breakthrough would be revealed to members at today’s meeting.

The new terms have already prolonged the strike, with employers saying they would add R1 billion to their wage bill, which would be unaffordable.

“Discussions have been very constructive and the producers are quietly optimistic that a negotiated settlement can be reached,” Charmane Russell, the spokeswoman for the producers, said yesterday.

“That said, agreements have not been concluded or signed. The engagement is expected to continue this week,” she added.

Amcu met representatives of Anglo American Platinum (Amplats) on Thursday night, and with Impala Platinum (Implats) and Lonmin on Friday.

“We discussed outstanding issues and tried to resolve them as much as we can. We have to wait and see what mandate Amcu gets from its members,” Implats spokesman Johan Theron said yesterday.

Among the new terms is a R3 000 back-to-work bonus for the each of the 70 000 striking employees, the withdrawal of criminal charges against Amcu members for incidents allegedly arising during the course of the strike and a moratorium on restructuring.

Amcu wants the companies to award a R1 000 annual increase over three years, and not R850 a year over five years.

Even before the strike, half the platinum producers were operating at a loss and grappled with increasing cost pressures, including energy and labour. With the strike, they have warned of the potential long-term structural impact and the higher probability, as a result of the strike, of restructuring and job losses.

The firms have warned that mechanisation was likely to replace labour-intensive mining.

Analysts have mixed views on whether companies are likely to restructure in the wake of the strike.

“I don’t think the government will stand in the way of restructuring of the mining companies after the strike. Ultimately, something has to give,” Sibonginkosi Nyanga, a mining analyst at Imara SP Reid, said on Friday.

However, Michael Kavanagh, a metals and mining analyst at Noah Capital, said the move to shallow mechanised assets could take years, and companies were not expected to restructure immediately after the strike ended.

Amplats was likely to restructure its operations by selling its struggling Rustenburg operations, Kavanagh said.

Implats and Lonmin were unlikely to restructure their operations after the strike ended because they would focus on expansion.

For example, Lonmin was likely to focus on improving productivity and Implats was expected to focus on the construction of its three new deep-level shafts 20, 16 and 17.

“The restructuring of mines is a smoke and mirrors game by the companies.